Comment Log Display

 
April 10th 2009
Mary Nichols, Chair
California Air Resources Board
1001 I Street
Sacramento, California 95814

RE:  Comments on Draft Low Carbon Fuel Standard Regulation

Primafuel strongly supports expeditious implementation of the
California Low Carbon Fuel Standard (LCFS) as an early action
measure to meet GHG reduction obligations under AB32.  Further
delay in implementation of the LCFS is unacceptable from a
political, economic, and environmental perspective.
Primafuel views the LCFS as one of the most effective
technology-neutral forms of regulation, and with proper
implementation it should generate clear and actionable price
signals to motivate the development and uptake of lower carbon
fuels.
Efficiency in Fuel Pathway Modification and Development: With this
market-minded view of the regulations, we believe that it is
imperative that the process for proposing new or modified fuel
pathways must be highly efficient.   In order for the LCFS to
result in more rapid development of sustainable low-carbon fuels,
the process must be substantially more dynamic than current
programs in which the Air Resources Board verifies and approves
emissions reduction technologies.  New and modified pathways must
be able to address both direct and indirect emissions associated
with the pathway in order to incentivize the development and
adoption of best practices and technologies.
The heated debate over Indirect Land Use Change (iLUC) impacts and
iLUC inclusion in life-cycle analysis should not result in a delay
in the implementation of LCFS.   With that said, the level of
uncertainty, even in direction, of iLUC calculations are high.  As
such, the ability to propose new and modified fuel pathways that
include changes to emissions associated with iLUC is critical. It
was noted at the March 27th meeting by CARB staff that an expanded
Method 2B could provide a process by which iLUC modifications might
be considered.  Further, it must be understood that the very notion
of iLUC is an artifact of regulatory jurisdiction.  The attempt to
include iLUC in life-cycle analysis is an attempt to quantify
leakage, which is both an important part of sound regulation and
the letter of the law.  Because iLUC is a jurisdictional artifact,
changes in land-use driven by policies and economic conditions
outside California become materially relevant to California’s LCFS.
 For example, more effective enforcement of forest protection laws
in other countries must by nature impact the iLUC component of the
life-cycle analysis of a fuel pathway.
Inclusion of Indirect Effects of all Pathways and Other
Industries: If reduction of greenhouse gas emissions is the indeed
the primary function of the LCFS, then industry supported ecosystem
protection is precisely the type of result that policy-makers
should desire.  Unfortunately, dramatic changes in global
native-ecosystem protection is unlikely to be driven by the
comparatively small biofuels industry.  When compared to other
industries that drive land-use change (pulp & paper, timber,
cattle, oil & gas, real estate development, etc.) the biofuels
industry is a new and weak force.  It is for this reason that as
other segments of the California economy are regulated under AB32,
direct and indirect impacts of those industries must be considered.
 
Prior to these expanded regulatory considerations, the myriad
indirect impacts of other fuel pathways must also be considered
under the LCFS.  The causality between expanded biofuels use in
California and iLUC impacts outside of California is assumed to be
commodity pricing, this is at the heart of economic equilibrium
models like GTAP.  As such, indirect sources of emissions driven by
commodity price changes caused by the expanded use of other
fuel-pathways must be considered, even when these indirect sources
of emissions are not land-use changes.  
Primafuel and our partners thank the California Air Resources
Board for the opportunity to participate in this vitally important
rule-making process.

Best regards,


Rahul Iyer

Chief Strategy Officer
Primafuel, Inc.
rahul.iyer@primafuel.com